Business Social Compliance Initiative

Code of Conduct





























March 2004


BSCI 2-03/04












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electronic, mechanical, photocopying, recording or otherwise, be lent, re-sold, hired out or otherwise circulated without the FTAs authority.

Copyright 2004 by
FTA Foreign Trade Association, Brussels gsm Global Sustainable Management GmbH, Cologne Migros-Genossenschafts-Bund, Zrich
Systain Consulting GmbH, Hamburg






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1

BSCI Code of Conduct

1. The Business Social Compliance Initiative (BSCI) membership is made up of retail companies and
associations, importers and producing companies. It is a common European monitoring system for
social compliance. Its goal is the continuous improvement of the social performance in members'
production and supply facilities worldwide. The BSCI monitoring system is not intended to replace
any other established external multistakeholder verification system.

2. The BSCI members consider themselves responsible for all of the activities carried in their name
worldwide. They feel a particular responsibility to provide decent working conditions for the
employees producing their products. BSCI members acknowledge that this responsibility extends
to all employees who make products for BSCI members, regardless of whether they are directly
employed by BSCI members or by third party subcontractors and suppliers.

3. In order to make an impact and promote socially acceptable production conditions, the BSCI
members have developed this Code of Conduct. All BSCI members suppliers worldwide are
obliged to comply with this Code of Conduct.

BSCI members approach the implementation of the Code of Conduct positively and in a spirit of
cooperation. They would like to maintain all existing business relationships while achieving full
compliance. The BSCI intends to increase awareness of the issues at hand and achieve continuous
and sustainable improvement in the coming years. The improvement in social compliance will
make suppliers well prepared to face existing and future market demands and legal requirements.
Suppliers social performance can be improved systematically over time while avoiding the risk of
boycott actions. It is the standpoint of the BSCI that sustainable economic development and
social progress can only be realised if the basic living standards are preserved or improved.

4. The Code of Conduct specifies minimum standards only. They should not be misinterpreted as
maximum limits and are not to be used against employees in any way, for example, to limit their
freedom of association or collective bargaining rights.

5. BSCI members consider themselves to be working in partnership with their suppliers. The
implementation of socially acceptable production conditions is based on dialogue, consensus,
cooperation, and on the principle of fairness. The interests of those parties most affected by
changes are kept in the foreground of any considerations and changes.

The implementation and enforcement of this Code of Conduct depends on the development status
of each individual supplier and their countries of operation. The BSCI's ultimate goal is its
complete realisation.

6. Suppliers must ensure that the Code of Conduct is also observed by all subcontractors involved in
production processes of final manufacturing stages, for example confection and assembly
activities, carried out on behalf of BSCI members.


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7. In accordance with the ILO conventions, the United Nations' Universal Declaration of Human
Rights and the UN's conventions on children's rights and the elimination of all forms of
discrimination against women, the BSCI Code of Conduct aims to attain compliance with certain
social and environmental standards. The following requirements are of particular importance:

7.1. Legal Compliance
Compliance with all applicable national laws and regulations, industry minimum standards,
ILO and UN Conventions, and any other relevant statutory requirements whichever
requirements are more stringent.

7.2. Freedom of Association and the Right to Collective Bargaining
In situations or countries in which the rights regarding freedom of association and collective
bargaining are restricted by law, parallel means of independent and free organisation and
bargaining shall be facilitated. - In accordance with ILO conventions 87, 98 and 135.

7.3. Prohibition of Discrimination
No discrimination shall be tolerated on the basis of gender, age, religion, race, caste, social
background, disability, ethnic and national origin, nationality, membership in workers
organisations including unions, political affiliation, sexual orientation, or any other personal
characteristics. - In accordance with ILO conventions 100 and 111.

7.4. Compensation
Wages paid for regular working hours, overtime hours and overtime differentials shall meet or
exceed legal minimums and/or industry standards. Illegal or unauthorised deductions from
wages shall not be made. In situations in which the legal minimum wage does not cover living
expenses and provide some additional disposable income, companies shall strive to provide
employees with adequate compensation to meet these needs. In accordance with ILO
conventions 26 and 131.

7.5. Working Hours
Overtime hours are to be worked solely on a voluntary basis. The maximum allowable
working hours in a week are 48 and the maximum allowable overtime hours in a week are
12. An employee is entitled to at least one free day following six consecutive days worked. -
In accordance with ILO conventions 1 and 14.

7.6. Workplace Safety
A clear set of regulations and procedures must be established and followed regarding
occupational health and safety. Workplace practice and conditions which violate basic human
rights are forbidden. In accordance with ILO convention 155 and ILO recommendation 164.

7.7. Prohibition of Child Labour
Child labour is forbidden as defined by ILO and United Nations conventions and/or by national
law. Of these various standards, the one that is the most stringent shall be followed. Any
forms of exploitation of children are forbidden. Working conditions resembling slavery or
harmful to children's health are forbidden. The rights of young workers must be protected. In
accordance with ILO conventions 79, 138, 142 and 182.

7.8. Prohibition of Forced Labour
All forms of forced labour are forbidden as is prisoner labour that violates basic human rights.
In accordance with ILO Conventions 29 and 105.

7.9. Environment and Safety Issues
Procedures and standards for waste management, handling and disposure of chemicals and
other dangerous materials, emissions and effluent treatment must meet or exceed minimum
legal requirements.

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8. BSCI members will encourage compliance with the requirements above, defining and
implementing appropriate procedures and monitoring their suppliers' compliance.

9. When a violation of the Code of Conduct is determined, BSCI members will immediately enter
into negotiations with the affected suppliers. Together, they will search for solutions and the BSCI
member will assist in resolving the problem. The solutions must always take into consideration
the best interests of the employees. If suitable solutions cannot be found, agreed upon and
implemented within a reasonable period of time, this is reasonable grounds for the termination
of further business relations.

10. Any actions taken by the BSCI and its members in no way reduce the burden of responsibility on
national and local governments, international NGOs and employee representatives to establish an
open market trade policy and to stipulate improvements in social conditions.

11. The BSCI is prepared to submit the substance of this declaration to public discussion and political
decision-making processes.




Brussels, February 2004






Copyright 2004 The English version is the legally binding one. BSCI 2.1-03/04


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Declaration

Declaration of Liability Regarding Compliance with the BSCI Code of Conduct

We, the undersigned hereby confirm:










That we have received and taken due note of the BSCI Code of Conduct and the management
manual.

That we are aware of all relevant laws and regulations of the country or countries in which our
company operates.

That we will inform Name of BSCI Member in case of conflict between provisions of the BSCI
Code of Conduct and any applicable laws or regulations in our countries of operation.

That we will observe and conform to the BSCI Code of Conduct in its entirety and without
amendment or abrogation.

That we will inform all of our subcontractors of the contents and requirements of the BSCI Code of
Conduct, and that we will ensure that they also comply with the provisions incorporated therein.

That Name of BSCI Member and any organisations acting on its behalf may carry out audits with
or without notice at our business premises and the business premises of our subcontractors at any
time.

Furthermore:

We agree to carry out a self-assessment of our social performance, and that of our subcontractors
upon the request of Name of BSCI Member, and to submit the details of these assessments to
Name of BSCI Member for evaluation. This will take the form of a completed BSCI self-
assessment questionnaire.

We shall notify Name of BSCI Member( of the location of all business premises used for the
manufacture of goods for (Name of BSCI Member(. We guarantee that the manufacture of goods
for (Name of BSCI Member( is carried out exclusively at the locations we have indicated. We
understand that failure to inform (Name of BSCI Member( of the a location where work for its
products is carried out is adequate justification for the immediate and unconditional termination of
all business and contractual relationships.

We will use the BSCI management manual exclusively for purposes relating to business and
monitoring activities of the BSCI and (Name of BSCI Member(. We will not allow any third parties
not involved in the BSCI compliance/monitoring process to have access to this manual.


Date ................................................................................... Name of company .......................................................................


Signature ........................................................................ Company Stamp/Seal


Name ................................................................................. Address ............................................................................................


Companys Customer ID/Code-Number ...................................................................................................................................

This document must be signed by a duly authorised representative of the company and returned to
Name of BSCI Member.

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Terms of implementation

All suppliers are obliged to take the measures necessary to implement and monitor the
BSCI Code of Conduct:

Management Responsibilities:


















by informing management and suppliers about the content of the BSCI Code of Conduct.
by establishing where responsibility lies within the company's organisation regarding all BSCI Code
of Conduct issues.
by appointing one or more management employees to be responsible for implementation of the
BSCI Code of Conduct.
by monitoring company compliance with the BSCI Code of conduct and implementing necessary
changes at its facilities.

Employee Awareness:
by giving a statement of their support for the principles of the BSCI Code of Conduct to their
employees and by informing and instructing their employees and those of their subcontractors
regarding the contents of the BSCI Code of Conduct. The company must have the BSCI Code of
Conduct translated in its entirety into the appropriate local language(s) and have it displayed it in a
prominent position at its factory and other premises. Employees must also receive verbal
orientation and information regarding the Code of Conduct in a language they understand.
by regularly training employees in workplace safety and on the impact of their activity on mankind
and the environment.

Record-Keeping:
by keeping records of the names, ages, working hours and the wages paid to all employees and
making these documents available to BSCI auditors on request.
by documenting the location of dangerous materials and other potential hazards
by monitoring and maintaining safety equipment and materials
by keeping up to date documentation regarding relevant statutory requirements and regulations.

Complaints and Corrective Action:
by appointing an employee responsible for handling complaints related to BSCI issues.
by documenting and investigating complaints from employees or third parties related to BSCI
issues, and reporting on their substance and any necessary corrective measures arising from them.
by making the resources available to implement necessary corrective measures.
by refraining from dismissals or other disciplinary measures against employees who pass on
information regarding compliance with the BSCI Code of Conduct.

Suppliers and Sub-Contractors:
by making the introduction of social standards and compliance with the BSCI Code of Conduct a
condition of all contracts that it enters into with suppliers.
by asking suppliers to report regularly about their progress in implementing the BSCI Code of
Conduct.

Monitoring:
by providing BSCI Members with relevant information about their activities and production sites.
by allowing audits of their business premises and activities and those of their subcontractors to be
carried out at any time with or without prior notice by organisations acting on behalf of BSCI
members.









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Consequences of Non-Compliance

If a supplier fails to meet the requirements of the BSCI Code of Conduct, and if no solutions can be
agreed upon and implemented within a reasonable amount of time, a BSCI member may choose to
halt current production, cancel corresponding contracts, suspend future contracts and/or terminate
the business relationship with the non-conforming supplier. If an audit reveals less than full
compliance with the BSCI Code of Conduct, the supplier must take the prescribed corrective actions
without delay. The period of time the supplier has to implement these corrective measures will be
agreed upon with the auditors, but may not exceed twelve months. If a supplier excluded in the past
on grounds of non-compliance shows later that it can fully comply with the BSCI Code of Conduct,
there is, in principle, no reason why a business relationship cannot be resumed.






Copyright 2004 The English version is the legally binding one. BSCI 2.1-03/04